Using Mediation and Arbitration to Resolve Conflict in Your Community

Ideally, all parties involved in your homeowners’ or condo association would work well together and agree on important association matters. But the reality is that disagreements and disputes are bound to arise. Oftentimes, the parties involved are able to settle their differences directly with each other – through honest and open communication – and come to a mutually agreed upon solution that resolves the dispute and keeps it from escalating further.

Unfortunately, direct conversation doesn’t always result in a resolution. When that occurs, the next step in the process is often mediation or arbitration. Both mediation and arbitration are alternative dispute resolution (ADR) methods that look to resolve disputes without the need for litigation. Not only can arbitration and mediation save both parties time, money and the hassle of going to court, but depending on state laws or association governing documents, they may actually be required.

If you have an issue with your association or fellow homeowners, and don’t know what your options are, a good property management company should be able to guide you. Before you consider taking legal action, you may also want to consult your association attorney to make sure you understand what your legal options are, as well as your limitations.

But first, here’s a brief overview of both processes - what they entail and how they are different.

Mediation

Mediation, which can be voluntary or mandatory, is considered a non-adversarial method of alternative dispute resolution. It is often cost-efficient and effective. The process is facilitated by a mediator – an independent, neutral third-party – who works with both sides to discuss the issues and reach a resolution. A mediator is not a judge. Therefore, he/she will not choose sides or determine the outcome of the dispute. The role of the mediator is to help the parties reach their own settlement agreement, one that they each consider fair and satisfactory. Attorneys are optional in this type of ADR. If either of the parties does not feel that mediation is serving their needs, they can leave at any time. Neither party is required to accept a decision made during mediation either. However, if both parties agree with the resolution reached, they can sign an agreement at the conclusion of the mediation process.
 

Arbitration.

Arbitration is basically a less formal version of a trial, and is considered an adversarial form of ADR. Arbitration is mandated in some states for certain association types. The process is facilitated by an arbitrator, whose role is similar to that of a private judge, and both sides are represented by attorneys. The arbitrator hears sworn testimony from witnesses, listens to evidence and reviews any relevant documents before making a final decision. This decision may be non-binding or binding, depending on what was agreed upon in advance. Non-binding arbitration is basically a professional opinion about how a case would result if it were to go to trial, whereas binding arbitration is a final decision that both parties must comply with. Binding arbitration cannot be appealed.

If neither mediation nor arbitration are successful, the next step may be litigation in a courtroom. This process is much more involved and includes attorneys, a judge, and possibly, a jury. Before you take any action, it is always a good idea to consult your association attorney to discuss your situation, options and best practices for dispute resolution. To learn more about best practices in community association management, visit FirstService Residential.